Reichert Works to Restore Balance to Charitable Donations

Congressman Dave Reichert (WA-08) joined Congressman John Larson (CT-01) in introducing bipartisan legislation to address a steep decline in charitable vehicle donations that has resulted in cuts to community services provided by non-profits across the nation.

Six years ago, Congress enacted changes in the tax code to address abuses in the vehicle donation process.  By doing so, it inadvertently created a new problem by actively discouraging donations, causing thousands of charities to curtail services.

Until 2005, a taxpayer could deduct the fair-market value of vehicles donated to charity if that amount was under $5000.  Since then, Congress limited deductions for vehicles worth more than $500 to the amount for which the charity resells a donated car.  In the first year after the law changed, the IRS reported a 67-percent decline in the number of vehicles donated, and an 80-percent decline in their value.

The Larson-Reichert bill (H.R. 860) would allow tax deductions based on fair market value up to $2,500, while leaving in place all the tracking and enforcement safeguards.  The legislation would protect against abuses without scaring away donors.  It is supported by the Salvation Army, American Heart Association, Society of St. Vincent de Paul, Habitat for Humanity, Volunteers of America, Amistad America and scores of other local and national non-profits that rely on vehicle donation as a revenue source.